18 & 19 MemoItem Nos. 18 & 19
TO: City Council
John Godwin, City Manager
FROM: Stephanie H. Harris, City Attorney
SUBJECT: Master Economic Development Agreement and Tax Abatement Agreement with
American SpiralWeld Pipe Company, LLC (for Agenda Items 20 and 21)
DATE: September 19, 2018
BACKGROUND: The Paris Economic Development Corporation and the City have negotiated
a Master Economic Development Agreement (the "Master Agreement") with American related
to American's planned investment of between $72,000,000.00 and $91,000,000.00 to construct a
spiral weld pipe manufacturing plant on land located in what is now the PEDC's business park
and including an approximately 10 acre tract presently owned by the City. As further
consideration for the Master Agreement, ASWP will commit to employing at least 60 Full Time
Equivalent workers with full benefits beginning the first full year of production. The Master
Agreement is by and among the City, PEDC and American and contains the following
components:
A. A Performance Agreement pursuant to TEX. LOC. Gov'T CODE CHAPTERs 501 AND 504
between PEDC and American relating to a grant of land from PEDC to American; a grant
of funds from PEDC to American; and a further cash -for -jobs incentive should American
add an additional 40 jobs over the initial 60;
B. An agreement under TEx. LOC. GOVT CODE CHAPTER 380 whereby the City grants
certain land to American; and
C. A Tax Abatement Agreement pursuant to TEx. TAX CODE CHAPTER 312 between the City
and American on the value of improvements made to said land.
With respect to the Tax Abatement Agreement (Exhibit C to the Master Agreement), the
abatement will be a seven year deescalating abatement beginning on January 1, 2020 and ending
on December 31, 2026, with construction to be completed by September 15, 2021, according to
the following schedule:
Year 1
100%
Year 2
100%
Year 3
70%
Year 4
70%
Year 5
50%
Year 6
25%
Year 7
25%
STATUS OF ISSUE: The PEDC approved the Master Agreement at its regular meeting on
September 18, 2018.
BUDGET: Seven year de-escalating tax abatement on the improvements as set out in the Tax
Abatement Agreement.
RECOMMENDATION:
For Agenda Item 20: Motion to approve a resolution approving a Master Economic
Development Agreement among the City, Paris Economic Development Corporation, and
American SpriralWeld Pipe Company, LLC; authorizing the Mayor or Mayor Pro Tem to
execute an agreement in substantial conformance to the Master Agreement provided in the
Agenda Packet; and authorizing the Mayor or Mayor Pro Tem to execute a deed for the
conveyance of the city property described in the Master Agreement.
For Agenda Item 21: Motion to approve a resolution approving a Tax Abatement Agreement
between the City and American SpiralWeld Pipe Company, LLC and authorizing the Mayor or
Mayor Pro Tem to execute an agreement in substantial conformance with the Tax Abatement
Agreement provided in the agenda packet.